United States District Court, S.D. New York
October 14, 2005.
MARVIN ROSENBLATT, Plaintiff,
CHRISTIE, MANSON & WOODS LTD., Defendant.
The opinion of the court was delivered by: P. CASTEL, District Judge
MEMORANDUM AND ORDER
Plaintiff Marvin Rosenblatt brings this action against
Christie, Manson & Woods Ltd. ("Christie's"), the international
auction house, alleging that Christie's failed to pay him certain
"introductory commissions" for sales of art collected by Nelson
Seabra, a wealthy Brazilian. Plaintiff alleges that, over the
course of approximately twelve years, both before and after Mr.
Seabra's death, Christie's sold at auction certain items that had
belonged to Seabra. Plaintiff has asserted claims for breach of
contract, breach of the duty of good faith and fair dealing,
breach of fiduciary duty, fraud, and constructive trust.*fn1
Defendant has moved for summary judgment dismissing the
complaint in its entirety. Defendant contends that plaintiff's
breach of contract and breach of duty of good faith and fair
dealing claims, insofar as they relate to sales that took place
between 1992 and 1996, are barred by the statute of limitations.
Defendant asserts that plaintiff's claims for breach of fiduciary
duty, fraud, and constructive trust must also fail for various
reasons. As regards sales in 2003 and 2004 of property consigned
by a cousin of Mr. Seabra, defendant contends that any such sales are outside the scope of plaintiff's
agreement for commissions and, in any event, were not the direct
result of plaintiff's introduction of Christie's to Seabra.
In addressing defendant's summary judgment motion, I have
considered only plaintiff's version of the facts and such other
facts as are not disputed by the plaintiff. Where multiple
inferences may be drawn from the facts, I considered only the
inference most favorable to plaintiff, the non-movant. For the
reasons discussed below, defendant's motion is granted.
Plaintiff is a professional jewelry dealer, who had, at various
times beginning in the 1960s and continuing up through the 1990s,
consigned jewelry and other property to Christie's for sale at
auction. (Rosenblatt Tr. 19-21; Rosenblatt Decl. ¶ 3) Sometime
shortly before April 11, 1990, plaintiff met with the then-CEO of
Christie's, Charles Allsopp (a/k/a Lord Hindlip), and told
Allsopp that Seabra was considering selling the contents of his
apartment in Rio de Janeiro. (Rosenblatt Tr. 57-58; Rosenblatt
Decl. ¶¶ 15-16) Rosenblatt considered himself "an extremely close
friend" of Seabra. (Rosenblatt Decl. ¶ 8) At the meeting between
plaintiff and Allsopp, Allsopp agreed, on behalf of Christie's,
that, if any sale through Christie's were to come about as a
result of plaintiff's introduction, he would be entitled to a
commission. (Rosenblatt Decl. ¶ 16)
The terms of the commission agreement were memorialized in an
April 11, 1990 letter, which stated, in relevant part: "This is
just to confirm that we will reserve introductory commission for
you, should any sales from Mr. Nelson Seabra materialise
[sic]. . . ." (Cmplt. Ex. A) Later in 1990, Christie's sent
several individuals to Seabra's apartment in Rio de Janeiro, and
various inventories and/or appraisals of Seabra's belongings were
prepared. (Rosenblatt Decl. ¶ 24) Plaintiff never discussed the
appraisals with Seabra, and, after 1991, never again discussed with Seabra the potential sale of the
contents of Seabra's apartment. (Rosenblatt Tr. 81-82, 87)
Between March 6, 1992 and November 27, 1996, Christie's auctioned
20 lots consigned by Seabra, the total auction price of which was
$171,800. After November 27, 1996, Christie's did not auction any
items consigned by Seabra. (Falsetta Decl. ¶ 6, Ex. A; Pl. 56.1
Resp. ¶¶ 19-21) Plaintiff was not aware of the 1992-96 sales
until 2004. (Rosenblatt Decl. ¶ 29)
On November 14, 2002, Seabra executed a deed of gift, conveying
title to his Rio de Janeiro apartment and all contents thereof to
his cousin, Nelson Seabra da Silva Veiga ("Veiga") and Veiga's
wife. The deed reserved to Seabra the use of the apartment and
its contents during his lifetime. (Veiga Decl. ¶ 8; Salzman Decl.
Ex. G; Pl. 56.1 Resp. ¶ 33)*fn2 On the same day that he
executed the deed, Seabra died of a heart attack. (Veiga Decl. ¶
9; Pl. 56.1 Resp. ¶ 29) As a result of Seabra's death, Veiga and
his wife became the sole owners of the apartment and the property
within, and were free to keep it or dispose of it as they saw
fit. (Veiga Decl. ¶¶ 7-8; Pl. 56.1 Resp. ¶ 34)
Shortly after Seabra's death, Candida Sodre, the Christie's
representative for Rio de Janeiro, got in touch with Veiga to
inquire about the disposition of the property that was contained
within Seabra's apartment. (Sodre Decl. ¶ 18; Pl. 56.1 Resp. ¶
37) Candida Sodre and her mother, Maria Thereza Sodre (who was
Candida Sodre's predecessor as Christie's Brazilian
representative), had known Seabra before his death. Seabra had
discussed the potential sale of his apartment and its contents
with Candida Sodre and other Christie's representatives on
numerous occasions during the 1990s, and appraisals were made of
certain objects, but no arrangements for such a sale were ever
made. (Sodre Decl. ¶¶ 7-15; Pl. 56.1 Resp. ¶ 26) Prior to the commencement of this lawsuit, plaintiff
had never heard of either Candida or Maria Thereza Sodre, and
Candida Sodre had never heard of plaintiff until after he
contacted Christie's in 2004, demanding the commissions that are
the basis for this action. (Rosenblatt Tr. 44-45; Sodre Decl. ¶
25; Pl. 56.1 Resp. ¶¶ 24-25)
The Sodres met with Veiga and his wife at Seabra's apartment to
discuss the potential sale of the apartment's contents in
February 2003. Over the course of the next several months, Sodre
and other Christie's personnel made a concerted effort to
convince the Veigas to sell the contents of the apartment through
Christie's. These efforts included updating the appraisals done
for Seabra in the late 1990s and appraising certain items that
had not previously been appraised. (Sodre Decl. ¶¶ 18-21; Pl.
56.1 Resp. ¶¶ 39-43) The Veigas, after entertaining the idea of
keeping the property, or of selling to or through some person or
entity other than Christie's, decided in June 2003 to consign the
contents of the apartment to Christie's for sale at auction.
(Veiga Decl. ¶¶ 10-13; Sodre Decl. Ex. A; Pl. 56.1 Resp. ¶¶
44-46) Sales of property consigned to Christie's by the Veigas
took place from October 22, 2003 through October 19, 2004. The
auction price for the items sold totaled approximately $2.8
million. (Falsetta Decl. ¶ 8, Ex. B; Pl. 56.1 Resp. ¶ 53)
In January 2004, plaintiff, while in the Christie's office in
Paris, came across a catalog that depicted "Property from the
Collection of Nelson Grimaldi Seabra" that had been auctioned on
October 22, 2003. (Rosenblatt Decl. ¶ 30, Ex. D) Upon discovering
that property which had once belonged to Seabra had been sold
through Christie's, plaintiff, in February 2004, requested an
accounting of the commissions and profits made by Christie's on
sales of property traceable to Seabra, and demanded payment of
unpaid commissions to which he believed he was entitled. (Cmplt.
¶ 20) Christie's responded to plaintiff's demand in a March 22,
2004 letter from its Senior Vice President and General Counsel,
wherein it contended that "whatever introduction Mr. Rosenblat [sic] may have provided in
1990 did not result in any sales through Christie's," and that
none of the sales in either time period (1992-96 or 2003-04)
"fall within the ambit of Lord Hindlip's letter." (Richards Decl.
Ex. F) This suit followed.
SUMMARY JUDGMENT STANDARD
Summary judgment "shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law." Fed.R.Civ.P.
56(c). In considering a summary judgment motion, the Court must
"view the evidence in the light most favorable to the non-moving
party and draw all reasonable inferences in its favor, and may
grant summary judgment only when no reasonable trier of fact
could find in favor of the nonmoving party." Allen v. Coughlin,
64 F.3d 77, 79 (2d Cir. 1995) (citation and quotation marks
omitted); accord Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587-88 (1986).
It is the initial burden of a movant on a summary judgment
motion to come forward with evidence on each material element of
its claim or defense, demonstrating that it is entitled to
relief. The evidence on each material element, if unrebutted,
must be sufficient to entitle the movant to relief in its favor,
as a matter of law. Vermont Teddy Bear Co. v. 1-800 Beargram
Co., 373 F.3d 241, 244 (2d Cir. 2004). When the moving party has
met this initial burden and has asserted facts to demonstrate
that the non-moving party's claim cannot be sustained, the
opposing party must "set forth specific facts showing that there
is a genuine issue for trial" as to a material fact.
Fed.R.Civ.P. 56(e). A fact is material if it "might affect the outcome of
the suit under the governing law. . . ." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, (1986). An issue of fact is
genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. Thus,
in order to survive summary judgment, plaintiffs must come forth
with more than a mere scintilla of evidence in support of their
position; they must come forward with evidence "on which the jury
could reasonably find for the plaintiff." Id. at 252. "The
non-moving party may not rely on mere conclusory allegations nor
speculation, but instead must offer some hard evidence showing
that its version of the events is not wholly fanciful." D'Amico
v. City of New York, 132 F.3d 145, 149 (2d Cir.), cert.
denied, 524 U.S. 911 (1998). In reviewing a motion for summary
judgment, the court must scrutinize the record, and grant or deny
summary judgment as the record warrants. See Fed.R.Civ.P.
56(c). In the absence of any genuine dispute over a material
fact, summary judgment is appropriate.
PLAINTIFF IS NOT ENTITLED TO COMMISSIONS ON THE 2003-2004
Plaintiff's claim to commissions on the 2003-04 sales fails
based upon the plain language of the contract. The 1990 letter,
which is the only basis for plaintiff's breach of contract claim,
provides as follows:
This is just to confirm that we will reserve
introductory commission for you, should any sales
from Mr. Nelson Seabra materialise [sic], at our
normal rate of either two-fifths of the vendor's
commission or one-fifth of the net profit, whichever
is the greater.
I am waiting to hear from Nelson Seabra when it would
be convenient for him to discuss the possible sales
and thank you, once again, very much for what could
be an excellent introduction.
(Cmplt. Ex. A) The sales that took place in 2003 and 2004 simply
are not "sales from Mr. Nelson Seabra. . . ."
Under New York law, in order to make out a claim of breach of
contract, a plaintiff must show: "(1) a contract; (2) performance
of the contract by one party; (3) breach by the other party; and
(4) damages." Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522,
525 (2d Cir. 1994) (citation omitted).*fn3 Where a written
contract is unambiguous, it should be enforced according to its
terms, and "[e]vidence outside the four corners of the document
as to what was really intended but unstated or misstated is
generally inadmissible to add to or vary the writing." W.W.W.
Assocs. v. Giancontieri, 77 N.Y.2d 157, 162 (1990). Whether a
contract is ambiguous is a question of law, and extrinsic
evidence should not be considered to create an ambiguity where
there would otherwise be none. Id. at 162-63.
Here, the contract, by its terms, entitles plaintiff to a
commission only on "sales from Mr. Nelson Seabra. . . ."
Plaintiff does not because he cannot dispute that the sales
in 2003 and 2004 did not result from any action of Seabra; Seabra
had died in November 2002. Nor does he or can he dispute that the
property ceased to be owned outright by Seabra once the deed of
gift was signed shortly before his death. It is undisputed that
the decision to sell the property in 2003 and 2004 was, in all
respects, made by Veiga, and that prior to his death Seabra had
not in any way attempted to influence Veiga to sell the property
through Christie's. (Veiga Decl. ¶ 14; Pl. 56.1 Resp. ¶ 47)
Plaintiff's argument that the 2003-04 sales are covered by the
contract depends on an interpretation of its terms that would
have the court read the language to mean "sales (by anyone, at
any time) of property which belonged to Nelson Seabra at the time
this contract is entered into." This would be a strained and
tortured interpretation of the simple words "sales from Mr.
Nelson Seabra materialise [sic]. . . ." In furtherance of
plaintiff's preferred interpretation, he tries to shift the focus
of the agreement away from the identity of the consignor,
contending that he is entitled to commission on any sales of the
"Inventoried Property," which he defines in the Complaint as "Mr.
Seabra's collection of art, furniture and valuable objects" as it
existed in January 1990. (Cmplt. ¶ 11) Defendant correctly points out that the contract says no such thing, and
that "`sales from Mr. Seabra' in 2003 and 2004" were "an
impossibility." (Def. Mem. at 19) Sales of property consigned by
Veiga over 13 years after the date of the contract, and after the
death of Seabra, cannot be said to fall within the ambit of the
agreement. The contractual language simply means that the "sales"
must be "from Mr. Nelson Seabra" i.e., by or from that specific
person; it is the sale, not the property, that must be from
The conclusion that the contract is unambiguous and that the
terms thereof do not contemplate plaintiff's entitlement to
commissions on sales of property consigned by someone other than
Seabra is dispositive of plaintiff's claims for breach of
contract as to the 2003-04 sales. Thus, there is no occasion to
resort to consideration of parol evidence as to the meaning of
the contract. See W.W.W. Assocs., 77 N.Y.2d at 162-63. The
Court notes that, in any event, the parol evidence proffered by
plaintiff amounts, in large part, to no more than plaintiff's
explanation of his unilateral understanding of the meaning of the
contract, rather than any understanding between the parties.
See, e.g., Rosenblatt Decl. ¶¶ 19 ("The use of the phrase
`sales from Mr. Nelson Seabra' was not understood by me to
require that the sale itself be one `by' Mr. Seabra from some
technical standpoint of property law . . . but only that it be a
sale of property stemming to any degree `from' my introduction of
Mr. Seabra."); 20 ("I understood `any sales' to make clear that
if `any' sale of property coming `from' Mr. Seabra were to occur,
my introductory commission would be `reserved' for me. . . .");
21 ("I understood Mr. Allsopp's use of the word `materialise'
[sic] to recognize that even though a sale from Mr. Seabra at
that time was only a possibility, if that possibility were to
come to fruition at some later time in whatever manner that
might occur or `materialize' Christie's would `reserve' an
introductory commission for me."). To the extent plaintiff
attributes oral statements to Allsopp, they are either irrelevant
to, or entirely consistent with, the Court's conclusion as to the meaning of the contract. See, e.g., Rosenblatt
Decl. ¶¶ 16 (Allsopp "made a point of stating that I could rely
upon Christie's"); 18 (Allsopp said "Christie's would faithfully
set aside and hold such funds for my benefit in the event `any
Even if the Court were to generously interpret the contract as
plaintiff suggests contrary to its plain meaning such that
2003-04 sales could somehow be deemed "sales from" the
then-deceased Seabra, plaintiff's claims would nonetheless fail.
The parties do not dispute that the contract at issue here is
properly characterized as one for a finder's fee. "[A] finder is
required to introduce and bring the parties together, without any
obligation or power to negotiate the transaction, in order to
earn the finder's fee." Northeast Gen. Corp. v. Wellington
Adver., Inc., 82 N.Y.2d 158, 163 (1993). Even though a finder,
unlike a broker, is not generally required to perform any
function above and beyond introducing the parties to the
transaction, there must be a causal connection between the
introduction made by the finder and the ultimate transaction in
order for the finder to recover. See Simon v. Electrospace
Corp., 32 A.D.2d 62, 66 (1st Dep't. 1969), modified as to
damages, 28 N.Y.2d 136 (1971) ("If a transaction ultimately
entered upon is a direct result of the disclosure of the
opportunity by the finder the latter is entitled to his
To establish [the required connection], the courts
have consistently required that the finder show more
than that his service was a necessary "but for"
condition. Rather, the finder must show that the
final deal which was carried through flowed directly
from [the] introduction. He must establish a
continuing connection between the finder's service
and the ultimate transaction.
Moore v. Sutton Res., Ltd., No. 96 Civ. 7522 (RWS), 1998 WL
67664 at *4 (S.D.N.Y. Feb. 18, 1998), aff'd, 165 F.3d 14 (2d
Cir. 1998) (citations and internal quotations omitted).
Plaintiff argues that the language of the contract here is
inconsistent with any requirement that there be a direct
connection between the introduction and the ultimate transaction. "[P]arties may, in certain circumstances, reach a specific
understanding that a finder's commission will be payable even if
the finder's efforts are not a direct or procuring cause of [the
transaction]. . . ." Barrister Referrals, Ltd. v. Windels, Marx,
Davies & Ives, 169 A.D.2d 622, 623 (1st Dep't. 1991). According
to plaintiff, that this is such a circumstance is evidenced by
the use of the word "materialise" [sic], which he points out "has
such meanings as `to appear as if from nowhere.'" (Pl. Opp. Mem.
at 17) Mere use of that word, even drawing all inferences in
favor of the plaintiff, does not suffice to render the contract
outside the realm of the basic structure for analyzing finder's
agreements. Under New York law, plaintiff is not entitled to
In Karelitz v. Damson Oil Corp., 820 F.2d 529 (1st Cir. 1987)
(Breyer, J.), the First Circuit undertook a thorough examination
of New York law applicable to finder's fee contracts, and
affirmed the district court's grant of judgment for the defendant
notwithstanding a jury verdict in favor of the plaintiff. At
issue in Karelitz was a written agreement providing that the
defendant would pay a specified commission to the plaintiff in
the event that the defendant were to acquire a specified
subsidiary of a third party. See id. at 529. In that case,
the plaintiff, Karelitz, met Damson, the president of the
defendant corporation, in 1971, became his personal stockbroker,
and the two began an "extensive, longlasting business
relationship." Id. at 530. In 1973, Karelitz suggested to
Damson that his company might be interested in purchasing from a
company called Buttes Gas and Oil an interest in another
corporation called Juniper Oil Corp. Karelitz arranged a meeting
among the principals of the various companies, after which Damson
told Karelitz that Karelitz "had done his job," and entered into
the written agreement confirming that Karelitz had been
responsible for introducing Damson to Juniper and providing that
Karelitz would be entitled to a 3 percent finder's fee "should
[Damson Oil] conclude with Buttes Oil an acquisition . . . or
like transaction involving Juniper." Though representatives of the three companies continued
to discuss the possible sale of Juniper to Damson Oil over the
course of the next few months, no sale took place. Id. at
Approximately four years later, in April 1977, Damson met with
the president of Buttes to once again discuss the sale of
Juniper. Karelitz was not involved in arranging this meeting.
While no sale of Juniper was consummated, Damson Oil purchased a
drilling barge from Buttes. Later that year, Damson Oil paid a
finder's fee to Karelitz based on the barge sale. When Karelitz
complained that the amount of the fee was insufficient, Damson
replied, "Your big money is going to be when we get the Juniper
deal closed." Id. at 530. Two years later, in October 1979, the
president of Buttes sought to sell Juniper and compiled a list of
20 potential buyers. Though Damson Oil was not on the list,
company officials heard that Juniper was on the market and
contacted Buttes. After reviewing confidential information
received from Buttes, Damson Oil indicated in February 1980 that
it was not interested in purchasing Juniper. In May 1981, Damson
and the president of Buttes were again brought together by a
third party (not Karelitz), and the ensuing negotiations resulted
in the sale of the Juniper interest to Damson Oil in March 1982.
Id. at 530-31. Apparently, Damson was so pleased with his
company's purchase that he "called Karelitz and asked Karelitz to
congratulate him. Karelitz did so; he also asked for his three
percent commission. Damson refused to pay." Id. at 531.
The First Circuit agreed with the district court that, on this
fact pattern, a reasonable jury could not have found the
requisite connection, which it described as "more than simply a
necessary `but-for' condition," between Karelitz's initial
introduction of Damson to Buttes/Juniper and the 1982 sale. Id.
at 531. It based its holding on three factors. The first was the
eight-year gap between the introduction and the beginning of the
negotiations which led to the sale. The court recognized that "passage of time alone
does not automatically negate a causal connection," but noted
that "the ever greater likelihood of new relevant events makes it
ever more reasonable to relegate the original introduction to the
status of `background fact' and ever less reasonable to give that
introduction the more elevated status of `cause.'" Id. at 532
(citations omitted). The second factor considered by the court
was that "the relevant circumstances changed rather dramatically"
during the eight-year lapse, specifically, that Juniper's
business grew exponentially and that there were drastic changes
in the oil market generally. Id. This lent further support to
the idea that "there was no continuity of negotiations that the
successful negotiations of 1981 bore no direct relationship to
those of 1973 or 1977." Id. Finally, the court cited
"uncontradicted evidence that Buttes' eventual interest in the
successful sale had nothing to do with the original
Taking these factors together, the court affirmed the district
court's grant of judgment notwithstanding the verdict, stating,
"we do not believe that a reasonable jury could find more than a
naked, `but-for' connection." Id. at 533. This was so despite
the fact that Karelitz maintained his relationship with Damson
throughout the 1973-81 period, occasionally bringing up the topic
of the Juniper investment, and that as late as 1980 Damson had
apparently acknowledged to Karelitz that the prospects for an
acquisition of Juniper looked favorable. Id. at 531.
In Moore, the district court granted summary judgment to the
defendant, Sutton, in a finder's fee suit. There, the plaintiff
had, pursuant to a written finder's fee agreement, introduced
Sutton to Lehman Brothers ("Lehman") by way of a January 1991
letter. One of the Lehman employees present at some of the
initial 1991 meetings between Lehman and Sutton was a man named
Eads. Eads left Lehman to join SBC Warburg ("Warburg") in 1993.
Sutton had a prior relationship with a Canadian subsidiary of
Warburg known as Bunting. See Moore, 1998 WL 67664 at *2. Plaintiff's claim in Moore
was premised on a 1996 agreement between Bunting and Sutton
whereby Bunting was to be the lead underwriter in an equity
financing for Sutton. Id. at *3. The agreement in Moore,
unlike the agreement at issue here, did not condition the
plaintiff's entitlement to a commission on a transaction being
consummated with a particular counterparty, but rather stated
that plaintiff would be paid "4% of the money raised for our
Company through your efforts." Id. at *1.
The court applied the Karelitz factors and concluded that
defendant was entitled to summary judgment dismissing the
complaint. Its decision was based on the "five year lapse between
introduction and deal, significant unforeseen changes in
circumstances, and a prior relationship and multiple third-party
interventions providing an independent basis for the
transaction." Id. at *6.
Applying the principles of New York law that underlie the
holdings in Karelitz and Moore, I conclude that no reasonable
jury could find the requisite relationship between Rosenblatt's
1990 introduction of Christie's to Seabra and the 2003
consignment of property by Veiga. The time lapse between the
initial introduction and the ultimate sale here over 13 years
is greater than in either of those two cases. There can be no
doubt that there were "changed circumstances." Seabra, the
individual to whom Rosenblatt introduced Christie's, and who is
named in the commission agreement, died, leaving the property in
question to Veiga and his wife, who, Rosenblatt admits, he had
never heard of prior to his deposition. (Rosenblatt Tr. 39) There
was also an independent relationship between Christie's and
Veiga, as well as between Christie's and Seabra; both Maria
Thereza Sodre and Candida Sodre were acquainted with both men.
(Veiga Decl. ¶ 9; Sodre Decl. ¶¶ 7, 17; Pl. 56.1 Resp. ¶¶ 13, 22,
35-36) Moreover, it is undisputed that, after Seabra's death,
Christie's made a concerted effort to persuade Veiga to consign the property to Christie's for sale.
(Veiga Decl. ¶¶ 10-13; Sodre Decl. ¶¶ 18-22; Pl. 56.1 Resp. ¶¶
Plaintiff claims there is a "continuing connection" between his
1990 introduction of Christie's to Seabra and the 2003
consignment by Veiga. He submits a document containing a notation
from Christie's computer system which, drawing all inferences in
plaintiff's favor, might be said to reveal that, as early as
1996, Christie's was preparing to deal with Seabra's heirs should
no transaction take place prior to his death. (Richards Decl. Ex.
D) He also points to a letter written to Veiga by Pedro Girao of
Christie's in February 2003, in which Girao, after expressing his
condolences, suggests that the prior relationship between Seabra
and Christie's constituted "an extremely good precedent" should
Veiga decide to sell any of the items he received from Seabra.
(Richards Decl. Ex. C) Plaintiff also contends that Veiga's
reference in his declaration to Christie's being "an appropriate
company" (Veiga Decl. ¶ 13) was likely "precisely because of the
past relationship created by plaintiff." (Pl. Opp. Mem. at 21)
None of this, however, suffices to defeat summary judgment
under the test employed in Karelitz and Moore. Even if
plaintiff could arguably establish at trial that had he not
introduced Christie's to Seabra in 1990, Veiga would not have
consigned the property in question to Christie's in 2003, such a
showing would not entitle him to recover. The causal relationship
which must be shown between the introduction and the final
transaction requires that the plaintiff "show more than that his
service was a necessary condition. Rather, the finder must show
that `the deal that was made resulted and flowed directly from
the original' introduction. He must establish a `continuing
connection' between the finder's service and the ultimate
transaction." Karelitz, 820 F.2d at 531 (quoting Seckendorff
v. Halsey, Stuart & Co., 234 A.D. 61, 71 (1st Dep't 1931),
rev'd on other grounds, 259 N.Y. 353 (1932) and Simon v. Electrospace Corp., 28 N.Y.2d 136, 142 (1971)). No
reasonable jury could find such a connection here. Drawing all
reasonable inferences in plaintiff's favor, defendant is entitled
to summary judgment with respect to breach of contract claims
relating to the 2003-04 sales.
The conclusion that the 2003-04 sales do not fall within the
scope of the contract also dooms plaintiff's claims for breach of
the duty of good faith and fair dealing as to those sales. Such
claims are derivative and duplicative of breach of contract
claims, and cannot create contractual rights not contemplated in
the contract at issue. See, e.g., Fasolino Foods Co. v.
Banca Nazionale Del Lavoro, 961 F.2d 1052, 1056 (2d Cir. 1992);
Kingdom 5-KR-41, Ltd. v. Star Cruises PLC, No. 01 Civ. 2946
(DLC), 2004 WL 1926090 at *5 (S.D.N.Y. Aug. 31, 2004) ("Having
failed to raise an issue of fact that would support a finding
that BNY breached a contractual duty to Kingdom, Kingdom cannot
salvage its contractual claim by resort to the implied duty of
good faith and fair dealing. The doctrine cannot be used to
create duties that do not arise from the contract and are
inconsistent with the terms of the contract."); Canstar v. J.A.
Jones Constr. Co.; 212 A.D.2d 452, 453 (1st Dep't. 1995)
(dismissing cause of action for breach of duty of good faith and
fair dealing as "intrinsically tied to the damages allegedly
resulting from a breach of the contract") (citing Fasolino
Foods, 961 F.2d at 1056).
CHRISTIE'S OWED PLAINTIFF NO FIDUCIARY DUTY
Defendant is also entitled to summary judgment on plaintiff's
claims of breach of fiduciary duty for the fundamental reason
that plaintiff cannot establish the existence of a fiduciary
relationship between himself and Christie's with regard to his
introduction of Christie's and Seabra. "Entering into a
conventional business relationship generally does not create a
fiduciary relationship." Maalouf v. Salomon Smith Barney, Inc.,
No. 02 Civ. 4770 (SAS), 2003 WL 1858153 at *5 (S.D.N.Y. Apr. 10, 2003) (citations
omitted); see also Chrysler Credit Corp. v. Dioguardi Jeep
Eagle, Inc., 192 A.D.2d 1066, 1068 (4th Dep't 1993) ("The
existence of a contractual relationship between the parties, by
itself, created no fiduciary duty. . . ."). This rule is
applicable in the case of finder's contracts. See Northeast
Gen., 82 N.Y.2d at 160 (finder does not owe fiduciary duty to
counterparty absent explicit term in contract); Village on Canon
v. Bankers Trust Co., 920 F. Supp. 520, 531-33 (S.D.N.Y. 1996).
That plaintiff had engaged in business transactions with
Christie's, in his personal capacity and entirely unrelated to
Seabra, and that he had a longstanding personal relationship with
Christie's Chairman, does not transform the contractual
relationship at issue here into a fiduciary one. See, e.g.,
Wit Holding Corp. v. Klein, 282 A.D.2d 527, 529 (2d Dep't.
2001). Assuming plaintiff's non-Seabra-related consignments to
Christie's had imposed a fiduciary duty on Christie's, such a
duty would apply only in connection with the particular
consignments. See Mickle v. Christie's, Inc.,
207 F.Supp.2d 237, 245 (S.D.N.Y. 2002). Such past dealings bear no relation to
the 1990 introductory commission contract.
Plaintiff contends that, because his agreement with Christie's
stated that Christie's would "reserve" commissions for him based
on potential sales of property consigned by Seabra, Christie's
became a fiduciary. Collecting and remitting money due to a
contractual counterparty, however, does not make one a fiduciary.
See Rodgers v. Roulette Records, Inc., 677 F.Supp. 731, 739
(S.D.N.Y. 1988) ("the fact that Roulette or Levy collected
royalties or fees which it had an obligation to pass on to
plaintiff did not make them plaintiff's fiduciaries"); see
also Vitale v. Sternberg, 307 A.D.2d 107, 109-10 (1st Dep't.
2003). Nor can a fiduciary relationship be found based on a
plaintiff's repeated conclusory assertion of a relationship of
"trust and confidence." See, e.g., Holloway v. King,
361 F. Supp.2d 351, 360-61 (S.D.N.Y. 2005). Granting plaintiff the benefit of all reasonable inferences, no
reasonable jury could find that Christie's owed plaintiff a
fiduciary duty in conjunction with the agreement for introductory
Defendant is entitled to summary judgment dismissing
plaintiff's cause action for breach of fiduciary duty.
PLAINTIFF'S FRAUD CLAIMS MUST ALSO BE DISMISSED
Plaintiff has also asserted a cause of action based in fraud.
As best as can be gleaned from the complaint and his opposition
papers, plaintiff's fraud claim is premised on Christie's failure
to inform him of the sales at issue in this case. See Cmplt. ¶
18 ("In violation of Christie's promises and fiduciary duties to
Plaintiff, Christie's willfully and deliberately failed to report
any of those sales to Plaintiff."). As discussed above, however,
Christie's in fact owed no fiduciary duty to plaintiff in
connection with the introductory commission arrangement. This
lack of a fiduciary relationship dooms a fraud claim based on
omission, rather than affirmative misstatements. "[I]n the
absence of a confidential or fiduciary relationship between [the
parties] imposing a duty to disclose, [defendant's] mere silence,
without some act which deceived [plaintiff] cannot constitute a
concealment that is actionable as fraud." Mobil Oil Corp. v.
Joshi, 202 A.D.2d 318, 318 (1st Dep't. 1994) (citation omitted).
Plaintiff claims that, even if Christie's had no fiduciary duty
to plaintiff, it assumed a duty to disclose when Allsopp
allegedly assured plaintiff that Christie's would "keep him
posted" on sales of items consigned by Seabra. (Pl. Opp. Mem. at
13) Even if Christie's had such a duty, however, plaintiff's
fraud claims are duplicative of his breach of contract claims,
and thus, must be dismissed. Under New York law, "[i]t is well
settled that a cause of action for fraud will not arise when the
only fraud charged relates to a breach of contract" Gordon v.
Dino De Laurentiis Corp., 141 A.D.2d 435, 436 (1st Dep't. 1988)
(citation omitted); see also River Glen Assocs. v. Merrill Lynch Credit Corp.,
295 A.D.2d 274, 275 (1st Dep't 2002). "[W]hen the alleged fraud
is not separate and distinct from a failure to perform under a
contract, the claim is treated as one sounding in contract rather
than tort." Reuben H. Donnelley Corp. v. Mark I Mktg. Corp.,
893 F. Supp. 285, 289 (S.D.N.Y. 1995) (citations omitted). Here,
as in Reuben H. Donnelley, the only alleged fraud is Christie's
concealment of the 1992-96 sales to avoid paying plaintiff the
commissions he was allegedly due. "Under New York law . . .
alleged concealment of a breach is insufficient to transform what
would normally be a breach of contract action into one for
fraud." Id. at 290 (citations omitted); see also Helprin
v. Harcourt, Inc., 277 F. Supp. 2d 327, 335-36 (S.D.N.Y. 2003)
(dismissing fraud claim where alleged fraudulent statements
consisted only of "purported false representations regarding
[defendant's] adherence to the terms of the [contract]").
To state a cause of action for fraud independent of a breach of
contract claim, the alleged fraud must be "collateral or
extraneous to the contract." Coppola v. Applied Elec. Corp.,
288 A.D.2d 41, 42 (1st Dep't. 2001) (citations omitted); see
also Weitz v. Smith, 231 A.D.2d 518, 519 (2d Dep't. 1996).
Here, plaintiff ties the alleged duty of disclosure back to the
language of the contract. See Rosenblatt Decl. ¶ 20 ("I
understood `any sales' [in the agreement] to make clear . . .
that I could trust Christie's both to inform me of the sale and
to pay me the agreed-upon commissions upon my subsequent
request."). Plaintiff's fraud claim is "merely a disguised
contract claim as the gravamen of the fraud claim is that
defendant promised to pay him commissions and failed to do so.
Therefore, this claim must be dismissed." Metzler v. Harris
Corp., No. 00 Civ. 5847 (HB), 2001 WL 194911 at *3 (S.D.N.Y.
Feb. 26, 2001) (footnote and citation omitted). Moreover,
plaintiff does not seek damages for fraud over and above those he
seeks for breach of contract. See Rockefeller Univ. v. Tishman
Constr. Corp. of New York, 240 A.D.2d 341, 342 (1st Dep't.),
lv. to appeal denied, 91 N.Y.2d 803 (1997) (fraudulent misrepresentation claim duplicative of
breach of contract claim "since the identical contractual benefit
of the bargain recovery is sought").
That summary judgment is granted in favor of defendant on
plaintiff's breach of contract claim does not alter the
conclusion that the fraud claim is duplicative. See e.g.,
River Glen Assocs., 295 A.D.2d at 275 (dismissing fraud claims
as "merely duplicative of the insufficient breach of contract
cause of action") (citation omitted); Morgan v. A.O. Smith
Corp., 265 A.D.2d 536, 536 (2d Dep't. 1999) lv. to appeal
denied, 95 N.Y.2d 758 (2000) (affirming grant of summary
judgment where fraud allegations were duplicative of allegations
supporting time-barred causes of action for breach of warranty).
PLAINTIFF'S CLAIMS WITH RESPECT TO THE 1992-96 SALES ARE
BARRED BY THE STATUTE OF LIMITATIONS
As regards the sales of property consigned by Seabra between
1992 and 1996, plaintiff's claims for breach of contract, and the
concomitant claims for breach of the duty of good faith and fair
dealing, are barred by the statute of limitations. The statute of
limitations for breach of contract claims in New York is six
years. See N.Y. CPLR § 213(2). The statute begins to run at the
time of the breach, regardless of whether the plaintiff is aware
of the breach at that time. See Ely-Cruikshank Co. v. Bank of
Montreal, 81 N.Y.2d 399, 402-04 (1993); ABB Indus. Sys., Inc.
v. Prime Tech., Inc., 120 F.3d 351, 360 (2d Cir. 1997) ("[I]n
New York it is well settled that the statute of limitation for
breach of contract begins to run from the day the contract was
breached, not from the day the breach was discovered, or should
have been discovered.") (citations omitted); T & N PLC v. Fred
S. James & Co., 29 F.3d 57, 60 (2d Cir. 1994) ("the Court of
Appeals has made clear that neither knowledge of the breach nor
cognizable damages are required to start the statute of
limitations running at breach"). Plaintiff contends that his action should not be deemed to have
accrued until he made demand for payment in 2004. The cases upon
which he relies are inapposite. See Continental Cas. Co. v.
Stronghold Ins. Co., 77 F.3d 16, 21 (2d Cir. 1996) (notice of
loss to reinsurers was a condition precedent to indemnity); In
re Estate of Allen, 30 Misc.2d 874, 879-80 (Surr.Ct. N.Y. Co.
1961) (action to compel administrator of estate to deliver
securities to decedent's heirs). Plaintiff's breach of contract
action accrued at the time of breach, the time the earlier sales
of property consigned by Seabra took place, entitling him to his
CPLR § 206(a)(1), alternatively relied on by plaintiff, is
inapplicable. That section only applies "where a demand is
necessary to entitle a person to commence an action." A demand
was not a condition precedent to plaintiff's right to bring a
claim for breach of contract. See Knauss v. Colpix Records,
No. 80 Civ. 2255 (PNL), 1982 U.S. Dist. LEXIS 11847 at * 4-*5
(S.D.N.Y. Mar. 19, 1982); Glynwill Invs., N.V. v. Prudential
Sec., Inc., No. 92 Civ. 9267 (CSH), 1997 WL 12802 at *3
(S.D.N.Y. Jan. 14, 1997). Moreover, the section applies only
"where a right grows out of the receipt or detention of money or
property by a trustee, agent, attorney or other person acting in
a fiduciary capacity." CPLR § 206(a)(1); see also Knauss,
1982 U.S. Dist. LEXIS 11847 at *5. As discussed above, the Court
has determined that the relationship between plaintiff and
Christie's was not fiduciary in nature.
The last of the sales of property consigned by Seabra took
place in November 1996. This action was commenced on June 4,
2004, well over six years later. The statute of limitations bars
the breach of contract claim as to the earlier sales. The claim
for breach of the duty of good faith and fair dealing as to these
sales is similarly barred by the six-year statute of limitations.
See Liberman v. Worden, 268 A.D.2d 337, 339 (1st Dep't.
2000); Mirman v. Berk & Michaels, P.C., No. 91 Civ. 8606 (JFK),
1994 WL 410881 at *13 (S.D.N.Y. Aug. 3, 1994). CONSTRUCTIVE TRUST
Because there was no fiduciary relationship between the
parties, plaintiff's constructive trust claim must fail. Under
New York law, "[i]n general, though as an equitable doctrine its
application to particular circumstances is susceptible of some
flexibility, to establish a constructive trust there must be
provided: (1) a confidential or fiduciary relation, (2) a
promise, express or implied, (3) a transfer made in reliance on
that promise, and (4) unjust enrichment." Bankers Sec. Life Ins.
Soc'y v. Shakerdge, 49 N.Y.2d 939, 940 (1980) (citations
omitted); see also Cerabono v. Price, 7 A.D.3d 479, 480 (2d
Dep't. 2004), lv. to appeal denied, 4 N.Y.3d 704 (2005).
Where equity does not demand deviation from these requirements
(see Ellis v. Provident Life & Accident Ins. Co.,
3 F. Supp.2d 399, 412 (S.D.N.Y. 1998), aff'd, 172 F.3d 37 (2d Cir.
1999)), "[t]he absence of the requisite confidential relationship
defeats plaintiff['s] efforts to impose a constructive trust."
Waldman v. Englishtown Sportswear, Ltd., 92 A.D.2d 833, 836
(1st Dep't. 1983); see also Rodgers v. Roulette Records.
Inc., 677 F. Supp. 731, 739 (S.D.N.Y. 1988) ("As concluded
above, the parties did not have a fiduciary relationship and thus
plaintiff cannot maintain an action to establish a constructive
trust.") (footnote omitted). Viewing the evidence in the light
most favorable to plaintiff and granting him the benefit of all
reasonable inferences, there is no basis for the imposition of a
constructive trust.*fn4 VI. CONCLUSION
For the reasons set forth herein, defendant's motion for
summary judgment dismissing plaintiff's complaint is GRANTED. The
Clerk is directed to enter judgment in favor of the defendant.
© 1992-2005 VersusLaw Inc.